1b

The plan of reorganizing for Taylor Companies, Incorporated, was approved by the court, stockholders, and creditors on December 31 , 20X1. The plan calls for a general restructuring of all of Taylor's debt. The company's llability and capital accounts on December 31 , 20X1, are as follows: A total of $30,500 of accounts payable has been Incurred since the company filed its petition for rellef under Chapter 11 . No other Ilabilitles have been incurred since the petition was filed. No payments have been made on the llabilities subject to the compromise that existed on the petition date. Under the terms of the reorganization plan: 1. The accounts payable creditors existing at the date the petition was filed agree to accept $73,170 of net accounts recelvable in full settlement of theif claims. 2. The holders of the 10 percent notes payable of $150,300 plus $16,200 of Interest payable agree to accept land having a fair value of $121,743 and a book value of $85,600. 3. The holders of the 10 percent bonds payable of $200,000 plus $20,000 of interest payable agree to cancel accrued Interest of $15,000, accept cash payment of the remaining $5,000 of interest, and accept a secured interest in the company's equipment in exchange for extending the term of the bonds for an additional year at no interest. 4. The common shareholders agree to reduce the deficit by changing the stock's par value to $2 per share and eliminating any remaining deficit after recognition of all gains or losses from the debt restructuring transactions specified in the plan of reorganization. The deficit will be eliminated by reducing additional paid-in capital. C omptete thix question by entering wour answers in the tabs below. Awoare the fournal entries to acoumt for the discharve of the debt and the restructuring of the common equity in fulfillment of the plan of regonanisathin. Note. If Aow entiry is required for a tiansactiongevent, seled "No journal entry required" in the first account field. A Aecont the discharve of debt. a Record the chanoe in par value of the stock and the elimination of the defict